Peter Schiff on Monday criticized the orange crypto for its price volatility and predicted that Bitcoin ETF markets would crash the on-chain BTC market even further.
The founder and chief economist, and global strategist for Euro Pacific Capital said on Monday that a selloff this week in Bitcoin ETFs will reveal the extent of the market’s woes over the weekend’s price declines.
Bitcoin ETFs saw $237.4 million in outflows on Friday, according to data from Farside Investors.
Peter Schiff: More Pain To Come in Bitcoin ETFs
“Once the Ethereum and Bitcoin ETFs open for trading CNBC will no longer be able to sugar coat the magnitude of the decline,” Schiff said . “That’s because those drops will included the losses from Saturday. If ETF investors sell instead of buy, liquidations could overwhelm the spot markets.”
Bitcoin price on crypto exchanges fell from a high above $68,000 a week ago to below $50,000 Monday as fears of a U.S. recession grip global markets in a panic. Goldman Sachs recently raised its recession odds to 25%.
The painful losses wiped over half a trillion dollars from crypto markets in a matter of days, leaving 300,000 crypto traders affected.
BTC’s Reserve Asset Suitability In Question
Schiff, an inveterate long-term Bitcoin skeptic, also took Monday to question Bitcoin’s value as a reserve asset for governments and central banks.
It’s a conversation that policymakers like Wyoming Senator Cynthia Lummis (R) and former President Donald Trump have recently moved forward. In July, Lummis proposed establishing a $67 billion strategic Bitcoin reserve.
Such a policy would diversify the U.S. Treasury’s balance sheet into cryptocurrency and represent a massive sea change in the government’s stance toward Web 3 properties. Peter Schiff said the recent crypto crash in Bitcoin’s price proves it is not suitable as a reserve financial instrument for civil body politics.
“This weekend’s #Bitcoin crash is an example of why Bitcoin will never be a reserve asset for any major government or central bank,” Schiff wrote. “A reserve asset must have relatively low volatility. It needs to be readily sold when needed. It can’t crash more than assets it’s supposed to hedge.”
